Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Section 202.06 of the NYSE Listed Company Manual, 54362-54365 [2015-22603]
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54362
Federal Register / Vol. 80, No. 174 / Wednesday, September 9, 2015 / Notices
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca –2015–01 and should be
submitted on or before September 21,
2015.36
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–22604 Filed 9–8–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75809; File No. SR–NYSE–
2015–38]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending
Section 202.06 of the NYSE Listed
Company Manual
September 2, 2015.
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Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
27, 2015, New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
36 The Commission believes that a 10-day
comment period is reasonable, given the
requirement that the Commission act on the
proposed rule change by October 2, 2015. A 10-day
period will provide adequate time for comment. See
supra notes 7 and 8.
37 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
section 202.06 of the NYSE Listed
Company Manual (the ‘‘Manual’’) to
expand the pre-market hours during
which listed companies are required to
notify the Exchange prior to
disseminating material news, to permit
the Exchange to halt trading in certain
additional circumstances, including
when it needs to obtain more
information about a listed company
news release, and to provide guidance
related to the release of material news
after the close of trading on the
Exchange. The text of the proposed rule
change is available on the Exchange’s
Web site at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The NYSE proposes to amend section
202.06 of the Manual to (i) expand the
pre-market hours during which listed
companies are required to notify the
Exchange prior to disseminating
material news, and (ii) provide the
Exchange with authority to halt trading
(a) during pre-market hours at the
request of a listed company, (b) when
the Exchange believes it is necessary to
request certain information from listed
companies, and (c) when an Exchangelisted security is also listed on another
national or foreign securities exchange
and such other exchange halts trading in
such security for regulatory reasons. The
Exchange also proposes to amend
section 202.06 of the Manual to provide
guidance related to the release of
material news after the close of trading
on the Exchange.
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Section 202.06 of the Manual gives
the Exchange authority to halt trading in
a listed company’s security under
certain circumstances. Currently, the
Exchange may impose a regulatory
trading halt when a listed company
announces material news 3 shortly
before the opening of trading on the
Exchange or during the Exchange
trading session (currently 9:30 a.m. to
4:00 p.m.). When that happens, the
Exchange will typically institute a
regulatory halt in trading, which halts
trading on all market centers, to ensure
full dissemination of the news to
investors. The Exchange proposes to
expand the hours and circumstances
under which it can declare a regulatory
trading halt.
Regulatory Trading Halts
Currently, section 202.06 of the
Manual requires listed companies to
notify the Exchange at least ten minutes
in advance of releasing material news if
such release will take place shortly
before the opening of trading on the
Exchange or during Exchange market
hours (the ‘‘Material News Policy’’).4
The Exchange proposes to amend
section 202.06 to require companies to
comply with the Material News Policy
between 7:00 a.m. and 4:00 p.m. Eastern
Time. In the Exchange’s experience,
most companies release news related to
corporate actions and other material
events between 7:00 a.m. and 9:30 a.m.
Although trading on the Exchange does
not begin until 9:30 a.m., the Exchange
believes that material news released
between 7:00 a.m. and 9:30 a.m. has the
potential to cause volatility in both
price and volume during pre-market
trading that occurs on other market
centers as well as once trading opens on
the Exchange. However, because there is
a lower volume of trading in such premarket hours, the Exchange believes
that a listed company is most well
positioned to determine whether a
trading halt is appropriate given the
news it intends to release. Therefore, to
facilitate an orderly opening and ensure
thorough dissemination of material
news, the Exchange believes it is
beneficial to require companies to
comply with the Material News Policy
3 The Exchange considers material news to be any
news that is reasonably likely to have a material
impact on the price or trading volume of a listed
security.
4 At the time section 202.06 of the Manual was
last amended, the Exchange had an off-hours
trading session in which securities could be traded
at Exchange closing prices after the Exchange’s 4:00
p.m. close until 5:00 p.m. As such off-hour trading
session no longer exists, the Exchange proposes to
amend Section 202.06 of the Manual to specify that
the Exchange’s market hours end at 4:00 p.m.
Eastern Time.
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and advise whether a trading halt is
appropriate during pre-market hours.
As discussed above, when a listed
company releases material news during
the course of the trading day, the
Exchange will typically halt trading
temporarily to ensure full dissemination
of the news. Under the proposed rules,
between 7:00 a.m. and the opening of
trading on the Exchange, the Exchange
may implement a regulatory halt in
circumstances where (i) the listed
company has informed Exchange staff
that it intends to make a public
announcement of material news and (ii)
the listed company requests that trading
in its listed securities be halted pending
dissemination of the public
announcement (a ‘‘Pre-Market Halt’’).5
While trading on the Exchange does not
begin until 9:30 a.m. Eastern Time,
trading (including trading in Exchangelisted securities) begins on NYSE Arca
Equities, Inc., the Nasdaq Stock Market
and other national securities exchanges
at 4:00 a.m. Eastern Time. When the
Exchange implements a regulatory
trading halt to allow for the release of
material news, other national securities
exchanges that trade Exchange-listed
securities also halt trading in such
security until the Exchange lifts the
halt.6
The Exchange notes that the volume
of trading in the hours before trading
begins on the Exchange is generally
lighter and conducted predominantly by
professional investors. Because of this
reduced trading volume and the fact
that the Exchange itself is not yet open
for trading during these hours, the
Exchange believes it is appropriate to
institute a Pre-Market Halt only at the
request of a listed company. The
Exchange notes that the Nasdaq Stock
Market (‘‘Nasdaq’’) has adopted a
comparable rule with respect to trading
halts between the hours of 7:00 a.m. and
9:30 a.m.7 Lastly, when a trading halt is
implemented during Exchange market
hours, NYSE Rule 123D specifies that a
Floor Governor or two Floor Officials
must approve the halt in trading.
However, because a Pre-Market Halt
will only be instituted at the request of
a listed company and because Floor
5 However, the proposed rule will state that if it
appears that dissemination of material news will
not be complete prior to the opening of trading on
the Exchange at 9:30 a.m., the Exchange may
temporarily halt trading solely in its own discretion
in order to facilitate an orderly opening process.
This is consistent with the Exchange’s current
practice.
6 See, for example, NYSE Arca Equities Rule 7.18
and Nasdaq Stock Market Rule 4120(a)(2) for the
authority to initiate a trading halt.
7 See, for example, Nasdaq Stock Market Rule
4120(a)(1) which applies between the hours of 4:00
a.m. and 9:30 a.m.
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Governors and Floor Officials are not
typically on the trading floor during premarket hours, the Exchange proposes to
include a statement that,
notwithstanding anything to the
contrary in NYSE Rule 123D(1), the
approval of the Floor Governors or Floor
Officials is not required for a Pre-Market
Halt.
The Exchange proposes to further
amend section 202.06 of the Manual to
set forth circumstances in which it may
institute a regulatory halt while it awaits
information requested from a listed
company. Section 202.06 of the Manual
currently limits the Exchange’s
authority to halt trading to situations
when a listed company intends to
release material news during market
hours. However, in the Exchange’s
experience there are other scenarios
when it may be advisable to halt trading
for the protection of investors. For
example, if there is uncertainty
surrounding material news issued by a
listed company or a company’s
compliance with the Exchange’s
continued listing standards, the
Exchange believes it may be appropriate
to halt trading while it gathers
information to resolve such ambiguity.
Accordingly, the Exchange proposes to
amend section 202.06 of the Manual to
state that if it is necessary to request
information from a listed company
relating to (i) material news, (ii) the
listed company’s compliance with
Exchange continued listing
requirements, or (iii) any other
information which is necessary to
protect investors and the public interest,
the Exchange may halt trading in such
listed company’s security until it has
received and evaluated the requested
information. The proposed change in
this regard mirrors Nasdaq Stock Market
Rule 4120(a)(5).
As discussed above, the Exchange
believes that the release of material
news immediately prior to the
commencement of trading on the
Exchange has the potential to cause
significant volatility to the opening
process. Similarly, material news
released immediately after 4:00 p.m.
Eastern Time can interfere with the
closing process. Although trading on the
Exchange stops at 4:00 p.m. Eastern
Time, the order book for each listed
security is manually closed by the
security’s Designated Market Maker
(‘‘DMM’’), a process that can take
several minutes before the closing
auction is completed. Because trading
continues after 4:00 p.m. Eastern Time
on other exchanges, if a listed company
releases material news immediately
after 4:00 p.m. Eastern Time there can
be significant price movement on other
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markets when compared to the last sale
price on the Exchange. The result,
therefore, is that a DMM can be
executing trades at the Exchange closing
price while the same security is
simultaneously trading on other
exchanges at a very different price. As
this discrepancy can cause confusion to
investors, the Exchange proposes to
include advisory text in section 202.06
of the Manual requesting that listed
companies intending to release material
news after the close of trading on the
Exchange wait until the earlier of the
publication of their security’s official
closing price on the Exchange or 15
minutes after the scheduled closing time
on the Exchange.8 The Exchange
proposes to specify that trading on the
Exchange typically closes at 4:00 p.m.
Eastern Time, except that on certain
days trading closes early at 1:00 p.m.
Eastern Time. As discussed in Footnote
4, above, the Exchange no longer has an
off-hours trading session. Therefore, the
Exchange proposes to delete obsolete
text (marked with an asterisk) related to
such session.
Lastly, the Exchange proposes to
amend section 202.06 of the Manual to
state that it may halt trading in an
American Depositary Receipt (‘‘ADR’’)
or other security listed on the Exchange,
when the Exchange-listed security (or
the security underlying the ADR) is
listed on or registered with another
national securities exchange or foreign
exchange or market and such other
exchange (or regulatory authority
overseeing such exchange) halts trading
in such security for regulatory reasons.
The Exchange notes that Nasdaq has
also adopted this practice under Nasdaq
Stock Market Rule 4120(a)(4).
Additional Proposed Changes
Section 202.06(C) of the Manual
requires companies to release material
news by the fastest available means.
Pursuant to section 202.06(A) of the
Manual, listed companies can disclose
such material news via any Regulation
FD compliant method, including by
filing a Form 8–K with the Securities
and Exchange Commission (the
‘‘Commission’’). Currently, section
202.06(C) includes advisory text on the
best way to release material news to
ensure immediate and widespread
coverage. The Exchange believes that
much of this advisory text is outdated
as it refers to, among other things, the
release of news by telephone, facsimile
or hand delivery. Instead, the Exchange
8 Although the Exchange typically closes at 4:00
p.m. Eastern Time, there are certain days each year
when it closes at 1:00 p.m. Eastern Time. The
phrase ‘‘15 minutes after the scheduled closing
time’’ will account for these early closings.
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Federal Register / Vol. 80, No. 174 / Wednesday, September 9, 2015 / Notices
proposes to include a concise statement
that listed companies releasing material
news should either (i) include the news
in a Form 8–K or other Commission
filing, or (ii) issue the news in a press
release to the major news wire services,
including, at a minimum, Dow Jones &
Company, Inc., Reuters Economic
Services and Bloomberg Business News.
The Exchange believes that distribution
by either of these methods is consistent
with current disclosure practices and
ensures adequate dissemination. To
make sections 202.06(B) and 202.06(C)
consistent, the Exchange proposes to
amend section 202.06(B) of the Manual
to delete a reference to ‘‘Dow Jones,
Reuters and Bloomberg’’ and replace it
with a reference to the ‘‘major’’ news
wires.
The Exchange proposes to make a
number of other non-substantive
changes to sections 202.03, 202.04 and
202.06 of the Manual. In sections
202.03, 202.04 and 202.06(B)–(C), the
Exchange proposes to delete the word
‘‘representative’’ after Exchange as listed
companies do not have a designated
Exchange representative to whom they
should communicate in relation to
material news.9 Similarly, in section
202.06 of the Manual, the Exchange
proposes to remove a reference to the
‘‘specialist’s book’’ as such book no
longer exists. Instead, the Exchange will
include a reference to ‘‘the Exchange.’’
In section 202.06 of the Manual, the
Exchange proposes to revise the section
headings to accurately reflect the new
rule text as described herein.
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) 10 of the Act, in general, and
furthers the objectives of section 6(b)(5)
of the Act,11 in particular in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
Exchange believes that the proposed
amendment is consistent with the
investor protection objectives of section
9 Currently,
the Exchange’s Market Watch team
performs this function. However, as the official title
of different groups occasionally changes, the
Exchange believes it is appropriate to refer simply
to ‘‘the Exchange’’ consistent with elsewhere in the
Manual.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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6(b)(5) because it gives the Exchange
greater flexibility to implement
regulatory trading halts in a listed
security when such halts may be
necessary for the protection of investors.
Specifically, the proposed rule change
will alter the hours in which listed
companies are required to comply with
the Material News Policy such that the
hours are from 7:00 a.m. to 4:00 p.m.
Eastern Time (rather than just shortly
before the opening of trading on the
Exchange and during the Exchange
trading session, as is currently the case).
The proposed rule change will also
enable the Exchange to (i) implement a
Pre-Market Halt at the request of a listed
company when the company intends to
issue material news between 7:00 a.m.
and 9.30 a.m. Eastern Time, (ii) halt
trading when it believes it is necessary
to request certain information from
listed companies, and (iii) halt trading
in an ADR or other Exchange-listed
security when the Exchange-listed
security or the security underlying the
ADR is listed on or registered with
another national securities exchange or
foreign exchange or market and is halted
on such other exchange or market for
regulatory reasons. Further, the
Exchange proposes to include a concise
statement, in lieu of existing advisory
text, that listed companies releasing
material news should either (i) include
the news in a Form 8–K or other
Commission filing, or (ii) issue the news
in a press release to the major news wire
services, including, at a minimum, Dow
Jones & Company, Inc., Reuters
Economic Services and Bloomberg
Business News. The Exchange believes
that distribution by either of these
methods is consistent with current
disclosure practices and ensures
adequate dissemination to the public.
Additionally, the Exchange proposes to
include advisory text in section 202.06
of the Manual requesting that listed
companies intending to release material
news after the close of trading on the
Exchange wait until the earlier of the
publication of their security’s official
closing price on the Exchange or 15
minutes after the scheduled closing time
on the Exchange. The Exchange believes
this change will eliminate confusion to
investors when a DMM is executing a
trade at the Exchange closing price
while the same security is
simultaneously trading on other
exchange [sic] at a very different price.
The Exchange believes that each of the
proposed changes enumerated above are
[sic] consistent with the investor
protection objectives of section 6(b)(5)
because they provide the Exchange with
additional authority to halt trading in
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circumstances where material news that
may impact trading is to be released by
listed companies or has not yet been
fully disseminated. The Exchange
believes that material news is highly
relevant to investors when deciding to
buy or sell securities and thus providing
the Exchange with additional authority
to halt trading while such news is
released and disseminated is protective
of investors.
In addition, the Exchange believes the
proposed rule change is consistent with
the protection of investors because it
will specify in Exchange rules the
scenarios in which a trading halt may be
necessary, thereby promoting
transparency in Exchange rules and
making them easier to navigate. In
giving the Exchange authority to declare
regulatory trading halts in situations
described herein, the proposed rule
change enables the Exchange to act in
the best interest of protecting investors.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that section
202.06 of the Manual, as amended, do
[sic] not impose any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. As discussed
herein, the Exchanges [sic] proposed
amendments to section 202.06 of the
Manual are designed to give the
Exchange greater flexibility to halt
trading in a particular listed security
when the Exchange believes a halt is
necessary or appropriate. Currently,
section 202.06 of the Manual only
permits the Exchange to implement
regulatory trading halts for the
dissemination of material news. As
currently drafted, the Exchange believes
these rules are unnecessarily restrictive
and do not cover the full spectrum of
situations where a trading halt may be
necessary for the protection of investors.
In addition, the Exchange believes that
its proposed changes are consistent with
the Nasdaq rules with respect to trading
halts. For the foregoing reasons,
therefore, the Exchange does not believe
that such changes impose any burden
on competition that is not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) of the Act 12 and Rule 19b–
4(f)(6) thereunder.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2015–38 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2015–38. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
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12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii)
requires a self-regulatory organization to provide
the Commission with written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
13 17
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Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NYSE–
2015–38 and should be submitted on or
before September 30, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–22603 Filed 9–8–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75829; File No. 265–29]
Equity Market Structure Advisory
Committee
Securities and Exchange
Commission.
ACTION: Notice of meeting.
AGENCY:
The Securities and Exchange
Commission Equity Market Structure
Advisory Committee is providing notice
that it will hold a public meeting on
Thursday, September 24, 2015, in MultiPurpose Room LL–006 at the
Commission’s headquarters, 100 F
Street NE., Washington, DC. The
meeting will begin at 10:00 a.m. (EDT)
and will be open to the public, except
for a period of approximately 60
minutes when the Committee will meet
in an administrative work session
during lunch. The public portions of the
meeting will be webcast on the
Commission’s Web site at www.sec.gov.
SUMMARY:
14 17
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54365
Persons needing special
accommodations to take part because of
a disability should notify the contact
person listed below. The public is
invited to submit written statements to
the Committee. The meeting will focus
on Rule 610 of SEC Regulation NMS and
the regulatory structure of trading
venues.
The public meeting will be held
on Thursday, September 24, 2015.
Written statements should be received
on or before September 21, 2015.
ADDRESSES: The meeting will be held at
the Commission’s headquarters, 100 F
Street NE., Washington, DC. Written
statements may be submitted by any of
the following methods:
DATES:
Electronic Comments
• Use the Commission’s Internet
submission form (https://www.sec.gov/
rules/other.shtml); or
• Send an email message to rulecomments@sec.gov. Please include File
Number 265–29 on the subject line; or
Paper Comments
• Send paper statements in triplicate
to Brent J. Fields, Federal Advisory
Committee Management Officer,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File No.
265–29. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method. The Commission
will post all statements on the
Commission’s Internet Web site at SEC
Web site at (https://www.sec.gov/
comments/265-29/265-29.shtml).
Statements also will be available for
Web site viewing and printing in the
Commission’s Public Reference Room,
100 F Street NE., Room 1580,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. All statements
received will be posted without change;
we do not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT:
Arisa Tinaves Kettig, Special Counsel, at
(202) 551–5676, Division of Trading and
Markets, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–7010.
SUPPLEMENTARY INFORMATION: In
accordance with Section 10(a) of the
Federal Advisory Committee Act, 5
U.S.C.-App. 1, and the regulations
thereunder, Stephen Luparello,
E:\FR\FM\09SEN1.SGM
09SEN1
Agencies
[Federal Register Volume 80, Number 174 (Wednesday, September 9, 2015)]
[Notices]
[Pages 54362-54365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22603]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75809; File No. SR-NYSE-2015-38]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Section 202.06 of the NYSE Listed Company Manual
September 2, 2015.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 27, 2015, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend section 202.06 of the NYSE Listed
Company Manual (the ``Manual'') to expand the pre-market hours during
which listed companies are required to notify the Exchange prior to
disseminating material news, to permit the Exchange to halt trading in
certain additional circumstances, including when it needs to obtain
more information about a listed company news release, and to provide
guidance related to the release of material news after the close of
trading on the Exchange. The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The NYSE proposes to amend section 202.06 of the Manual to (i)
expand the pre-market hours during which listed companies are required
to notify the Exchange prior to disseminating material news, and (ii)
provide the Exchange with authority to halt trading (a) during pre-
market hours at the request of a listed company, (b) when the Exchange
believes it is necessary to request certain information from listed
companies, and (c) when an Exchange-listed security is also listed on
another national or foreign securities exchange and such other exchange
halts trading in such security for regulatory reasons. The Exchange
also proposes to amend section 202.06 of the Manual to provide guidance
related to the release of material news after the close of trading on
the Exchange.
Section 202.06 of the Manual gives the Exchange authority to halt
trading in a listed company's security under certain circumstances.
Currently, the Exchange may impose a regulatory trading halt when a
listed company announces material news \3\ shortly before the opening
of trading on the Exchange or during the Exchange trading session
(currently 9:30 a.m. to 4:00 p.m.). When that happens, the Exchange
will typically institute a regulatory halt in trading, which halts
trading on all market centers, to ensure full dissemination of the news
to investors. The Exchange proposes to expand the hours and
circumstances under which it can declare a regulatory trading halt.
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\3\ The Exchange considers material news to be any news that is
reasonably likely to have a material impact on the price or trading
volume of a listed security.
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Regulatory Trading Halts
Currently, section 202.06 of the Manual requires listed companies
to notify the Exchange at least ten minutes in advance of releasing
material news if such release will take place shortly before the
opening of trading on the Exchange or during Exchange market hours (the
``Material News Policy'').\4\ The Exchange proposes to amend section
202.06 to require companies to comply with the Material News Policy
between 7:00 a.m. and 4:00 p.m. Eastern Time. In the Exchange's
experience, most companies release news related to corporate actions
and other material events between 7:00 a.m. and 9:30 a.m. Although
trading on the Exchange does not begin until 9:30 a.m., the Exchange
believes that material news released between 7:00 a.m. and 9:30 a.m.
has the potential to cause volatility in both price and volume during
pre-market trading that occurs on other market centers as well as once
trading opens on the Exchange. However, because there is a lower volume
of trading in such pre-market hours, the Exchange believes that a
listed company is most well positioned to determine whether a trading
halt is appropriate given the news it intends to release. Therefore, to
facilitate an orderly opening and ensure thorough dissemination of
material news, the Exchange believes it is beneficial to require
companies to comply with the Material News Policy
[[Page 54363]]
and advise whether a trading halt is appropriate during pre-market
hours.
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\4\ At the time section 202.06 of the Manual was last amended,
the Exchange had an off-hours trading session in which securities
could be traded at Exchange closing prices after the Exchange's 4:00
p.m. close until 5:00 p.m. As such off-hour trading session no
longer exists, the Exchange proposes to amend Section 202.06 of the
Manual to specify that the Exchange's market hours end at 4:00 p.m.
Eastern Time.
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As discussed above, when a listed company releases material news
during the course of the trading day, the Exchange will typically halt
trading temporarily to ensure full dissemination of the news. Under the
proposed rules, between 7:00 a.m. and the opening of trading on the
Exchange, the Exchange may implement a regulatory halt in circumstances
where (i) the listed company has informed Exchange staff that it
intends to make a public announcement of material news and (ii) the
listed company requests that trading in its listed securities be halted
pending dissemination of the public announcement (a ``Pre-Market
Halt'').\5\ While trading on the Exchange does not begin until 9:30
a.m. Eastern Time, trading (including trading in Exchange-listed
securities) begins on NYSE Arca Equities, Inc., the Nasdaq Stock Market
and other national securities exchanges at 4:00 a.m. Eastern Time. When
the Exchange implements a regulatory trading halt to allow for the
release of material news, other national securities exchanges that
trade Exchange-listed securities also halt trading in such security
until the Exchange lifts the halt.\6\
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\5\ However, the proposed rule will state that if it appears
that dissemination of material news will not be complete prior to
the opening of trading on the Exchange at 9:30 a.m., the Exchange
may temporarily halt trading solely in its own discretion in order
to facilitate an orderly opening process. This is consistent with
the Exchange's current practice.
\6\ See, for example, NYSE Arca Equities Rule 7.18 and Nasdaq
Stock Market Rule 4120(a)(2) for the authority to initiate a trading
halt.
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The Exchange notes that the volume of trading in the hours before
trading begins on the Exchange is generally lighter and conducted
predominantly by professional investors. Because of this reduced
trading volume and the fact that the Exchange itself is not yet open
for trading during these hours, the Exchange believes it is appropriate
to institute a Pre-Market Halt only at the request of a listed company.
The Exchange notes that the Nasdaq Stock Market (``Nasdaq'') has
adopted a comparable rule with respect to trading halts between the
hours of 7:00 a.m. and 9:30 a.m.\7\ Lastly, when a trading halt is
implemented during Exchange market hours, NYSE Rule 123D specifies that
a Floor Governor or two Floor Officials must approve the halt in
trading. However, because a Pre-Market Halt will only be instituted at
the request of a listed company and because Floor Governors and Floor
Officials are not typically on the trading floor during pre-market
hours, the Exchange proposes to include a statement that,
notwithstanding anything to the contrary in NYSE Rule 123D(1), the
approval of the Floor Governors or Floor Officials is not required for
a Pre-Market Halt.
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\7\ See, for example, Nasdaq Stock Market Rule 4120(a)(1) which
applies between the hours of 4:00 a.m. and 9:30 a.m.
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The Exchange proposes to further amend section 202.06 of the Manual
to set forth circumstances in which it may institute a regulatory halt
while it awaits information requested from a listed company. Section
202.06 of the Manual currently limits the Exchange's authority to halt
trading to situations when a listed company intends to release material
news during market hours. However, in the Exchange's experience there
are other scenarios when it may be advisable to halt trading for the
protection of investors. For example, if there is uncertainty
surrounding material news issued by a listed company or a company's
compliance with the Exchange's continued listing standards, the
Exchange believes it may be appropriate to halt trading while it
gathers information to resolve such ambiguity. Accordingly, the
Exchange proposes to amend section 202.06 of the Manual to state that
if it is necessary to request information from a listed company
relating to (i) material news, (ii) the listed company's compliance
with Exchange continued listing requirements, or (iii) any other
information which is necessary to protect investors and the public
interest, the Exchange may halt trading in such listed company's
security until it has received and evaluated the requested information.
The proposed change in this regard mirrors Nasdaq Stock Market Rule
4120(a)(5).
As discussed above, the Exchange believes that the release of
material news immediately prior to the commencement of trading on the
Exchange has the potential to cause significant volatility to the
opening process. Similarly, material news released immediately after
4:00 p.m. Eastern Time can interfere with the closing process. Although
trading on the Exchange stops at 4:00 p.m. Eastern Time, the order book
for each listed security is manually closed by the security's
Designated Market Maker (``DMM''), a process that can take several
minutes before the closing auction is completed. Because trading
continues after 4:00 p.m. Eastern Time on other exchanges, if a listed
company releases material news immediately after 4:00 p.m. Eastern Time
there can be significant price movement on other markets when compared
to the last sale price on the Exchange. The result, therefore, is that
a DMM can be executing trades at the Exchange closing price while the
same security is simultaneously trading on other exchanges at a very
different price. As this discrepancy can cause confusion to investors,
the Exchange proposes to include advisory text in section 202.06 of the
Manual requesting that listed companies intending to release material
news after the close of trading on the Exchange wait until the earlier
of the publication of their security's official closing price on the
Exchange or 15 minutes after the scheduled closing time on the
Exchange.\8\ The Exchange proposes to specify that trading on the
Exchange typically closes at 4:00 p.m. Eastern Time, except that on
certain days trading closes early at 1:00 p.m. Eastern Time. As
discussed in Footnote 4, above, the Exchange no longer has an off-hours
trading session. Therefore, the Exchange proposes to delete obsolete
text (marked with an asterisk) related to such session.
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\8\ Although the Exchange typically closes at 4:00 p.m. Eastern
Time, there are certain days each year when it closes at 1:00 p.m.
Eastern Time. The phrase ``15 minutes after the scheduled closing
time'' will account for these early closings.
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Lastly, the Exchange proposes to amend section 202.06 of the Manual
to state that it may halt trading in an American Depositary Receipt
(``ADR'') or other security listed on the Exchange, when the Exchange-
listed security (or the security underlying the ADR) is listed on or
registered with another national securities exchange or foreign
exchange or market and such other exchange (or regulatory authority
overseeing such exchange) halts trading in such security for regulatory
reasons. The Exchange notes that Nasdaq has also adopted this practice
under Nasdaq Stock Market Rule 4120(a)(4).
Additional Proposed Changes
Section 202.06(C) of the Manual requires companies to release
material news by the fastest available means. Pursuant to section
202.06(A) of the Manual, listed companies can disclose such material
news via any Regulation FD compliant method, including by filing a Form
8-K with the Securities and Exchange Commission (the ``Commission'').
Currently, section 202.06(C) includes advisory text on the best way to
release material news to ensure immediate and widespread coverage. The
Exchange believes that much of this advisory text is outdated as it
refers to, among other things, the release of news by telephone,
facsimile or hand delivery. Instead, the Exchange
[[Page 54364]]
proposes to include a concise statement that listed companies releasing
material news should either (i) include the news in a Form 8-K or other
Commission filing, or (ii) issue the news in a press release to the
major news wire services, including, at a minimum, Dow Jones & Company,
Inc., Reuters Economic Services and Bloomberg Business News. The
Exchange believes that distribution by either of these methods is
consistent with current disclosure practices and ensures adequate
dissemination. To make sections 202.06(B) and 202.06(C) consistent, the
Exchange proposes to amend section 202.06(B) of the Manual to delete a
reference to ``Dow Jones, Reuters and Bloomberg'' and replace it with a
reference to the ``major'' news wires.
The Exchange proposes to make a number of other non-substantive
changes to sections 202.03, 202.04 and 202.06 of the Manual. In
sections 202.03, 202.04 and 202.06(B)-(C), the Exchange proposes to
delete the word ``representative'' after Exchange as listed companies
do not have a designated Exchange representative to whom they should
communicate in relation to material news.\9\ Similarly, in section
202.06 of the Manual, the Exchange proposes to remove a reference to
the ``specialist's book'' as such book no longer exists. Instead, the
Exchange will include a reference to ``the Exchange.''
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\9\ Currently, the Exchange's Market Watch team performs this
function. However, as the official title of different groups
occasionally changes, the Exchange believes it is appropriate to
refer simply to ``the Exchange'' consistent with elsewhere in the
Manual.
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In section 202.06 of the Manual, the Exchange proposes to revise
the section headings to accurately reflect the new rule text as
described herein.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) \10\ of the Act, in general, and furthers the
objectives of section 6(b)(5) of the Act,\11\ in particular in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
The Exchange believes that the proposed amendment is consistent with
the investor protection objectives of section 6(b)(5) because it gives
the Exchange greater flexibility to implement regulatory trading halts
in a listed security when such halts may be necessary for the
protection of investors. Specifically, the proposed rule change will
alter the hours in which listed companies are required to comply with
the Material News Policy such that the hours are from 7:00 a.m. to 4:00
p.m. Eastern Time (rather than just shortly before the opening of
trading on the Exchange and during the Exchange trading session, as is
currently the case). The proposed rule change will also enable the
Exchange to (i) implement a Pre-Market Halt at the request of a listed
company when the company intends to issue material news between 7:00
a.m. and 9.30 a.m. Eastern Time, (ii) halt trading when it believes it
is necessary to request certain information from listed companies, and
(iii) halt trading in an ADR or other Exchange-listed security when the
Exchange-listed security or the security underlying the ADR is listed
on or registered with another national securities exchange or foreign
exchange or market and is halted on such other exchange or market for
regulatory reasons. Further, the Exchange proposes to include a concise
statement, in lieu of existing advisory text, that listed companies
releasing material news should either (i) include the news in a Form 8-
K or other Commission filing, or (ii) issue the news in a press release
to the major news wire services, including, at a minimum, Dow Jones &
Company, Inc., Reuters Economic Services and Bloomberg Business News.
The Exchange believes that distribution by either of these methods is
consistent with current disclosure practices and ensures adequate
dissemination to the public. Additionally, the Exchange proposes to
include advisory text in section 202.06 of the Manual requesting that
listed companies intending to release material news after the close of
trading on the Exchange wait until the earlier of the publication of
their security's official closing price on the Exchange or 15 minutes
after the scheduled closing time on the Exchange. The Exchange believes
this change will eliminate confusion to investors when a DMM is
executing a trade at the Exchange closing price while the same security
is simultaneously trading on other exchange [sic] at a very different
price. The Exchange believes that each of the proposed changes
enumerated above are [sic] consistent with the investor protection
objectives of section 6(b)(5) because they provide the Exchange with
additional authority to halt trading in circumstances where material
news that may impact trading is to be released by listed companies or
has not yet been fully disseminated. The Exchange believes that
material news is highly relevant to investors when deciding to buy or
sell securities and thus providing the Exchange with additional
authority to halt trading while such news is released and disseminated
is protective of investors.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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In addition, the Exchange believes the proposed rule change is
consistent with the protection of investors because it will specify in
Exchange rules the scenarios in which a trading halt may be necessary,
thereby promoting transparency in Exchange rules and making them easier
to navigate. In giving the Exchange authority to declare regulatory
trading halts in situations described herein, the proposed rule change
enables the Exchange to act in the best interest of protecting
investors.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that section 202.06 of the Manual, as
amended, do [sic] not impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act. As
discussed herein, the Exchanges [sic] proposed amendments to section
202.06 of the Manual are designed to give the Exchange greater
flexibility to halt trading in a particular listed security when the
Exchange believes a halt is necessary or appropriate. Currently,
section 202.06 of the Manual only permits the Exchange to implement
regulatory trading halts for the dissemination of material news. As
currently drafted, the Exchange believes these rules are unnecessarily
restrictive and do not cover the full spectrum of situations where a
trading halt may be necessary for the protection of investors. In
addition, the Exchange believes that its proposed changes are
consistent with the Nasdaq rules with respect to trading halts. For the
foregoing reasons, therefore, the Exchange does not believe that such
changes impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
[[Page 54365]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) requires a
self-regulatory organization to provide the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSE-2015-38 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2015-38. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2015-38 and should be
submitted on or before September 30, 2015.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-22603 Filed 9-8-15; 8:45 am]
BILLING CODE 8011-01-P